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At least €500m in fresh equity will be raised while existing shareholders – Investor, the Wallenberg investment vehicle, owns 23 per cent while EQT’s partners own the rest – will sell down their stakes pro-rata.
Swedish buyout firm and one of the biggest in the Nordic region, EQT Partners, apparently plans a Stockholm listing this year in what could be the called a biggest European IPO for one private equity firm in more than twenty years.
The planned IPO is supposed to enclose 20% of the total share number in the company, which will incorporate around 500 million euros ($550 million) in newly issued stock plus a sale of shares by existing investors.
The company has arranged on JPMorgan and SEB as global coordinators for the Stockholm listing and Goldman Sachs, Morgan Stanley, UBS, and Nordea will jointly be running books.
Last year the company said they are trying to find ways of supporting growth and “weather tougher times.” Thomas von Koch, EQT’s Managing Partner and CEO then said:
“The world around us is changing fast and competition is fiercer than ever. We are continuously looking at ways of future-proofing EQT and have decided to review options to further strengthen EQT’s balance sheet. We need a stronger balance sheet to support EQT’s continued global growth and make us resilient to weather tougher times”,
EQT Chief Executive Officer Christian Sinding confirmed they already have an anchor investor in Investor AB and a listing will give them better access to the capital markets. He added that they believe a listing is the most appealing path for continued long-term growth.
Earlier this year Sinding said that any listing would take place ahead of a looming bear market but now he confirmed that the planned IPO was “not particularly related to the cycle”. He added:
“We’ve had a fairly long bull cycle. So as an investor today you have to be prepared for a certain change in the markets or a downturn.”
Sinding noted that EQT had “almost built a fort in Europe” and is now spreading to France as well. Even though it is pretty popular in the US, they decided now to focus their expansion in the coming years on Asia, real estate and growth investments. One of the goals of the IPO is to allow EQT to become a “cornerstone investor in its own funds”.
However, initial public offerings for buyout firms in this region have been pretty rare.
This IPO could value the company at about 40 billion euros, and concerning the stake EQT is planning to sell, this IPO could become the largest by a European private equity firm since 3i Group Plc’s $1.1 billion share sale back in 1994.
Allegedly, the plan is to price the deal by the end of September, before the deadline for Britain’s exit from the European Union, for which traders think it could cause huge stock market volatility. EQT increased 23 percent a year since its founding. It added that it expected assets under management for the private equity industry as a whole to increase 10 percent a year in the future, compared with 15 percent growth in 2012-16.
The company’s other listed matches include France’s Eurazeo SE and Switzerland’s Partners Group Holding AG.
Investor AB, founded by the wealthy Wallenberg family, is EQT’s anchor investor and has 23% of the buyout firm. EQT’s founder, Conni Jonsson, owns 7%, managing director Thomas von Koch owns 5% while Sinding owns 4%.
Since its establishment back in 1994, EQT has grown on international level adding venture capital, real estate, infrastructure and credit to its portfolio. The company also raised more than 61 billion euros for investment funds since it was started about 25 years ago.